Today, Ducati is one of the most successful motorcycle companies in the world with adramatic profit growth since 1996. Before its huge success, Ducati was one step away fromfacing bankruptcy. Ducati managed to overcome such an obstacle through strong innovation andculture. Today, Ducati is faced with another challenge that may bring fortune to the company if successfully managed. Ducati set a new goal, which is to sustain the explosive double-digit profitgrowth in the next decade and eventually reach Harley Davison’s profit level.
Ducati isconsidering attacking Harley Davidson by entering the cruiser market, which is HarleyDavidson’s niche product and also a very profitable market segment in the industry. To do this,Ducati must invest 17 million Euro and cost of 26 million Euro. Based on this huge capitalrequirement, should Ducati enter the new market segment or should Ducati just concentrate onits current segment? If Ducati chooses to enter the cruiser market, what are other requirements besides the capital?
Does Ducati have what it takes to succeed in the new market segment? The purpose of this memo is to help the executives of Ducati to make the optimumdecision for Ducati’s future success. This memo contains the industry analysis, as well as aninternal strategic analysis, company performance, and solutions and recommendations. Thisindustry is divided into 4 segments. Ducati’s dominating segment is the sport sector. Ducatimanaged to utilize its differentiation strategy by taking into account of the industry’s drivingforces.
The cruiser segment is one sector that Ducati is very interested in entering. Unfortunately,Bert’s consulting concluded that this is not the best option through the feasibility analysis. Theanalysis contains the advantages and disadvantages of both options and the result was that thedisadvantages outweighed the advantages. Also, entering the cruiser market is not reallynecessary for Ducati based on its current performance level.
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